Jet Republic, which last year announced a plan to buy up to 110 Bombardier Learjet 60XRs and launch a fractional-share business in Europe, has suspended operations at its Portugal subsidiary. As a consequence, Bombardier “terminated its firm and conditional order purchase agreement with Jet Republic.” The company’s first Learjet 60XR was to have been delivered in October. The move by Bombardier, announced on August 20, cuts its backlog by 25 Learjet 60XRs worth $340 million (the other 85 aircraft in the Jet Republic order were options).
“Jet Republic’s Portuguese subsidiary has suspended its activities,” said a Jet Republic spokesman. The group is therefore preserving its remaining financial resources and will be reviewing its options.” Jet Republic’s holding company remains operational, he added, “and will work closely with our shareholders to ensure that the interests of our existing clients, employees and suppliers are protected to the best of our ability.”
Jet Republic’s plans were still on track on June 30 when CEO Jonathan Breeze did an interview on Bloomberg television, during which he noted, “The recession has helped us because it’s allowed us to go back to our suppliers and say, ‘We need to do this together and for the long term, so let’s all look at pricing.’ So our customers are getting better pricing this year than they would have done before.”
Breeze said that all-inclusive costs for Jet Republic 60XR shareowners would be about €6,000 per hour. Last year, Breeze told AIN that the company was being financed by Austria’s Euram Bank and a consortium of its clients and that Jet Republic’s founders were turning away prospective investors who still saw business aviation as an attractive investment.
More recently, Jet Republic said it was trying to lift an injunction preventing Jet Republic from hiring NetJets employees. A Portuguese court granted the injunction last year.
According to a memo to employees from Breeze provided to Web site Fractional Life, “It is with great regret that I announce that Jet Republic appears to be technically insolvent. The business expected to receive funds today that have not arrived, nor do we expect them to arrive in the immediate future. We needed these funds in order to continue as an operation. As such, we must stop trading immediately. We will place no more orders with suppliers; we will accept no more revenue from customers; we will solicit no more business from potential customers.”
Bombardier is not altering production plans for the 60XR and “remains committed to the Learjet 60 XR program,” the company said.